Abundant Natural Gas Drives Operators To Liquids Shale Plays

By Rita Tubb, Executive Editor | June 2012, Vol. 67 No. 6

“We’re higher right now on the Permian Basin than any other region in the U.S.,” he said. “There are multiple zones in the Permian and the producing community is proven. They know what they’re doing and have been doing it for a long, long time.”

Warren saw problems with future pipeline in the Marcellus. “You don’t know what it will cost to build infrastructure,” he said.

He also noted that the Marcellus is in Pennsylvania and West Virginia, areas that don’t have eminent domain. “The bandwidth of cost estimates could well be a 50 to 70 percent contingency,” he said. “Unlike Texas, where you have eminent domain, you might have a 5 percent contingency.”

Warren also considers the Haynesville Shale dry. “I question whether or not you can drill a Haynesville well today that would make any economic sense unless you are just drilling it to hold acreage,” he said.

As for the Bakken, he sees a lack of infrastructure in this region as a problem. “There is not a lot of natural gas associated with the Bakken,” he said, “and the majority of the crude in the Bakken is presently being trucked to rail sites for shipping wherever possible.”

He anticipates a crude line being built in the Bakken, but for now it remains a problem.

In providing an update on what’s ahead in Washington, Cathy Landry, communications director for INGAA and the INGAA Foundation, shared her views.

For the most part she indicated that since no one knows who will win the election, there is little incentive in Washington to move forward with new legislation. Nevertheless, she did express concern that both the EPA and environmentalists seem to be focusing on methane and the capture of fugitive emissions.

NTSB speaker
Luncheon keynote speaker Mark R. Rosekind, Ph.D. board member, National Transportation Safety Board, provided an informative presentation on the findings and recommendations resulting from the San Bruno explosion.

While noting that mistakes were made prior to the San Bruno incident, Rosekind said pipelines remain the safest and most cost-effective means to transport the extraordinary volumes of natural gas and liquids that fuel our economy.

The NTSB spokesman emphasized that pipeline companies follow strict regulations and standards to ensure pipeline safety. “As a result,” he said, “serious pipeline incidents are increasingly rare.”